Sorry to resurrect this thread but there were a couple of points
here that struck me..
On Sun, 1 Dec 2002, Tim Pozar wrote:
> As a co-founder of an early ISP (TLGnet), I had originally defended
> these appropriate use policies as the low pricing of residential
> broadband supports it. Up until recently[1], wholesale broadband
> costs were at $200-500 per Megabit per month.
As far as I know, reasonable quality Internet connectivity (excluding
deals for peering arrangments, as you noted) still bottoms out at around
$200 per month per megabit, up through the 50-100mbit range.
> ISPs assume that customers will be using a small fraction of the
> bandwidth available to them. In this way they can charge $50 a
> month to the consumer. If the model is broken where the average
> bandwidth is more than what is estimated, then these low residental
> rates will need to be raised.
Well put, and this is exactly why the blue-sky "the net is free as
air, why shouldnt we share!" rhapsodising bugs me. You can share
5-10megabit LAN access all you want, but most people's destinations
are on the Internet, through skinny and expensive WAN connections, which
are emphatically *not* free as the air. A single client can easily
saturate a wan link and there are no provisions on home-grade WAPs,
firewalls, and DSL routers for fair queuing. All it takes is one person
"sharing" your net by sharing the contents of their hard drive over a
p2p net or IRC to turn everyone else's performance into molasses.
> [1] A number of ISPs such as Cogent are offering wholesale bandwidth
> at $30-50 a Megabit per month. There is some industry concern
> about the peering arrangement they have and how they can continue
> to offer these prices and be profitable. Many other co-location
> providers are using Cogent and this pricing in their service
> pricing (ie. Level3, Stream Guys, etc.) We may get to the
> point, like in Japan that bandwidth costs are just not a factor
> to end user pricing. For instance, in Japan you can get 6Mb/s
> DSL for $20 a month and 12 Mb/s DSL for about $30 a month.
I talked to cogent a couple of years ago when we were shopping for
high-bandwidth ISPs. Please correct me if their pricing or business
model has changed since then, but at the time, the "100 megabits for
$1000 / mo" deal was predicated upon a) fiber availability to your
site (buildout costs not included), and b) your location being a
suitable multi-tenant facility where they'd be able to get more
customers to amortize the cost of the backhaul. They're doing the
same thing as the DSL ISP's, just with the MRF and Mb times 10.
I don't think Level3 is using Cogent, if anything Cogent uses
either Level3's "wavelength" semi-dark-fiber product or their IP
network for transit.
People inevitably argue with the oversubscription idea, from user-
to-modem ratios back in the dialup days, through cable modem caps
and to the current discussion. The answer is always the same: if
you don't want your uplink oversubscribed, pay for dedicated bandwidth.
That cost is considerably more than $50 a month.
[ Full disclosure: "we" above means "at my day job", not the address
on this email. We ended up going with Yipes, a Cogent competitor,
for layer-2 connectivity into Level3's IP network. ]
--
Eric Sorenson - EXPLOSIVE Networking - http://explosive.net
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